One year after USDA Organic Standards are enacted, more Americans are consuming organic food

AUSTIN, Texas (October 14, 2003) More than one-half of Americans (54 percent) have tried organic foods, with nearly one-third (29 percent) claiming to consume more organic foods and beverages than one year ago, according to the 2003 Whole Foods Market Organic Foods Trend Tracker. In addition, Americans are expanding their horizons beyond traditional gateways to organic foods such as produce and dairy. The survey, which was released one year after the U.S. Department of Agriculture's National Organic Standards went into effect, shows organic options including snacks, ready-to-go and packaged goods have increased in the last year. In addition, across all product channels, sales of 100 percent “certified organic” products are growing at 21 percent, according to data released this month by SPINS.

The overwhelming majority (69 percent) of “frequent organic eaters” (eat organic several times a week) claim they are eating more organic foods than one year ago; meanwhile, 43 percent of “occasional organic eaters” (eat organic several times a month) and 16 percent of “infrequent organic eaters” (have tried, but do not consume regularly) report eating more organic foods than one year ago. Overall, 14 percent of the U.S. population is eating more organic foods than they were one year ago.

The

2003 Whole Foods Market Organic Foods Trend Tracker

is an annual survey commissioned by Whole Foods Market (NASDAQ: WFMI), the world's largest natural and organic foods supermarket. The survey of 1,000 Americans, now in its second year, was conducted by Synovate in August 2003 and is representative of the United States adult population and individual questions returned statistical errors ranging between +/- 3% to 6%.

Approximately one year after the USDA-mandated National Organic Standards required “clearer labeling,” one out of three Americans (29 percent) believe the new logo and/or clearer labeling has an impact on their decision to purchase organic foods. Nearly one-half (47 percent) of those claiming to consume more organics than they did one year ago say that clear, credible organic labeling makes them more inclined to purchase organic foods.

“It is refreshing to see consumers reflect what we anticipated with October 2002's National Organic Standards labeling compliance. Americans are excited about organic foods and introducing them into their varying lifestyles,” said Margaret Wittenberg, vice president of governmental and public affairs for Whole Foods Market. “The mainstreaming of organics has created a gateway for consumers to expand their horizons with organic food choices with an eye toward maintaining their budgets.”

The Cost of Organics

Even though one out of five Americans (19 percent) is more inclined to purchase organic foods regardless of price point, price still remains the biggest barrier for consumers who do not eat organic foods to try organic foods. Nearly, seven out of ten (69 percent) who do not eat organic foods claim price is a major factor in their decision.

“Organic, not conventional foods, are the bargain when all of their effects on human, animal and environmental health are factored in,” said Katherine DiMatteo, executive director, Organic Trade Association, the business organization representing the $13 billion organic industry in North America. “Organic food prices represent the true cost of production. Conventional prices do not. They fail to incorporate $10 billion a year in externalities, the costs passed onto society at large.” (To review the OTA's recent organic-conventional food price analysis by ecologist/author Sandra Steingraber, Ph.D., visit www.ota.com or www.theorganicreport.org) Due to the industry growth and consumer demand, the price of organic foods is becoming more competitive while availability and variety of products is increasing. Whole Foods Market has been on the vanguard of providing organic options for budget-conscious shoppers. Working closely with local farmers and vendors, the company has brought a wide array of organic choices at the best prices in the marketplace. To accommodate consumers for whom cost may still be a barrier, the company launched its own house brand, 365 Organic Everyday Value™ line, now the largest line of everyday-value organic items in the country, ranging from produce to pantry-stock items.

Whole Foods Market's Whole Kids™ Organic line, the first and only organic foods made especially for — and taste-tested — by kids, and the Authentic Food Artisan™ collection complement the company's 365 Organic Everyday Value products.

The Mainstreaming of Organics

Produce continues its reign as the primary gateway to organics. However, consumers are purchasing more organic foods in expanding categories. The category with the most growth over the year is “snacks,” with 18 percent of infrequent users claiming to purchase organic snacks. The biggest gateway for infrequent users remains produce (63 percent), followed by bread or bakery products (21 percent) and then non-dairy (e.g. juice or soy) beverages (20 percent).

According to this year's survey, consumers who buy organics claim to purchase the following organic products:

From Farm to Store to Shopping Cart — A Commitment to Organic Integrity

This summer, Whole Foods Market became America's first national certified organic grocer, meaning retail operations have been certified organic by Quality Assurance International (QAI), a federally recognized independent third-party certification organization.

“This voluntary certification is just one more example of Whole Foods Market's commitment to the promotion of organic agriculture and the integrity of the USDA's certified organic label,” said Wittenberg.

Throughout the more than 145 Whole Foods Market stores in the United States and at www.wholefoodsmarket.com, consumers can find detailed information about the new standards and how to preserve organic integrity of products in their own homes.

Survey Methodology:

Synovate, the new name for Market Facts, conducted the E-Nation Online Survey commissioned by Whole Foods Market in August 2003. The sample size of the nationally representative omnibus polls was 1,084 Americans aged 18 and up. Individual questions returned error margins ranging between +/- 3% to 6%. The sample consists of individuals selected from the online segment of Synovate's Consumer Opinion Panel and is balanced to be representative of the general population based upon region, gender, age and household income data from the U.S. Census Bureau.

Supporting Facts from Whole Foods Market 2003 Organic Foods Trend Tracker

Cost and availability continue to be key factors to purchase. Convenience and nutritional value are also trends that are becoming increasingly important to consumers. Organic foods and beverages will play a major role in this market segment. As the organic consumer becomes more involved in the lifestyle, they begin to look for a broader selection of products. According to the survey, following are reasons that would drive consumers to purchase organic products:

Organic Attributes

Organic means different things to different people. According to the Hartman Group research for Whole Foods Market, following are the perceived attributes of organics. Interestingly, there is a significant disparity between regular user and infrequent user for quality (85% vs. 46%) and taste (76% vs. 27%): According to the survey, consumers who buy organics agree that organics are: